Project Updates

In a proposed exception to the Colorado Roadless Rule, which provides for management of National Forest roadless areas where such activities as tree cutting and road construction are prohibited, the Forest Service analyzes the climate effects of its proposal. Though the agency’s choices to monetize greenhouse gas emissions and to use the Interagency Working Group’s estimates of the Social Cost of Carbon in its supplemental environmental impact statement are appropriate and necessary, its application of the metric is flawed in several respects.

Jayni Hein, our policy director, recently participated in the Department of the Interior’s (DOI’s) inaugural listening session on the federal coal program. Hein provided recommendations for modernizing the fiscal terms of federal coal leases at this Washington D.C meeting, held on July 29th. DOI organized the event to solicit input from the public about how the the agency can best carry out its responsibility to ensure that American taxpayers receive a fair return on the coal resources managed by the federal government on their behalf. Secretary of the Interior Sally Jewell attended the listening session.

Our new regulatory report offers guidance on how how the EPA can improve its cost-benefit analysis for a new proposed rule regulating the dispersants used to clean up oil spills and other major pollution events.

Policy Integrity recently filed public comments on the Bureau of Ocean Energy Management’s (BOEM’s) new offshore leasing proposal, suggesting that the agency update its use of “option value” to improve its valuation of offshore resources.

Policy Integrity senior advisor Michael Livermore represented the plaintiff in Center for Sustainable Economy v. Jewell, a lawsuit challenging the Bureau of Ocean Energy Management’s (BOEM’s) 2012-2017 leasing plan for the Gulf of Mexico and the Alaskan coast. The Center for Sustainable Economy (CSE) argued that incomplete and flawed economic analysis leads the government to sell resource leases too quickly and too cheaply, potentially costing the American public billions of dollars and leading to high-risk drilling. Today, the U.S. Court of Appeals for the D.C. Circuit ruled against CSE in the case. However, part of the ruling could lead to major changes in how the government values the natural resources it leases.

Policy Integrity’s multi-year effort to make the government account for “option value” in its natural resource leasing decisions has begun to pay off. In its new proposal for offshore oil and gas leasing from 2017-2022, the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) devotes 12 pages to option value and related resource valuation concepts, which will now be considered in leasing decisions. Much of this language closely resembles the arguments Policy Integrity has made to the agency repeatedly since 2009.

Driven by growth in the production of oil in the U.S. and Canada, there has been a significant increase in rail transportation of crude oil over the past five years, with a corresponding increase in the number of accidents. Many oil trains pass through sensitive environmental habitats and densely populated areas, and even share track with commuter trains in some regions.

The government’s offshore leasing system fails to account for uncertainties about environmental harms—the system ignores “option value,” a well-established economic technique that quantifies the value of delaying decisions to acquire crucial information. As a result, the current leasing system leads to over-exploitation of natural resources and excessive environmental risk.